7/31/11

It just seems too obvious

Markets expected to rise on word of debt deal Ending a perilous stalemate, President Barack Obama announced an agreement on a compromise to avoid the nation's first-ever financial default. Jittery financial markets are rising on the news. (July 31)(Source: USA Today)

The global markets are soaring because of the debt deal. Did things change that much?

What about the European credit problems? What about the stalled US economy? The depressed state of the US consumers and 9.2% unemployment rate?

Oh well...let's enjoy the rally as long as it lasts!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Interesting

Germany has secured a piece of the Pacific Ocean floor with the intention of harvesting natural resources from it. As of 2021, it can start collecting copper, nickel and cobalt, which must otherwise be imported.(Source: DW)

No limits to human ingenuity.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Thought of the day

OK, Congress is going to reach a deal. Then what? Did the problems of the world disappear?

The markets will be strong on Monday. Euphoria. But Europe is still there. Our economic imbalances have not be resolved. The inventory cycle is still a dominant force. Can profits improve if the economy slows down even further?

What to do? Read the next issue of The Peter Dag Portfolio and the latest Market Update..

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/30/11

Thought of the day

The Chinese accumulation of US Treasury bonds was the automatic consequence of Chinese policies that the US opposed.

The Chinese criticize our policies. The reason we buy a lot from them is because their products are inexpensive due to their cheap RMB policy.

If they let the RMB appreciate we would not buy so many goods from them and they would not have so many dollars in their hands.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

The tentacles of bureaucracy endanger job creation and economic growth

Case 1. List of jobs requiring licensing (click on the chart to enlarge it).By imposing onerous and usually pointless requirements on those wishing to enter a trade or line of work, state legislatures erect needless barriers.

Case 2. INDIANAPOLIS -- "Drivers attending the Indiana State Fair or a major sporting event downtown may sometimes opt to grab a parking spot in someone's yard rather than pay higher prices in a parking lot, but some city officials think people who provide parking spots should get a permit first. City leaders are proposing that residents pay a $75 fee (per event) if they want to turn their yards into parking lots."

Case 3. Atlanta handed over all public-property vending to a single company' This company wants to throw two street vendors out of the spots they have worked for over a decade to build kiosks that rent for almost $20,000 a year.
(Source: the always excellent Carpe Diem).


The way bureaucracy exercises power -- and job security -- is by convincing us of imaginary risks so that we need to keep updated on obscure regulations and licensing requirements. By doing so, however, the economy is gradually becomes strangled. Furthermore, increasing regulations justify an army of auditors to make sure business people follow the law.

Unfortunately slow economic growth encourages the bureaucracy to increase regulations protecting ourselves against ourselves.

I have seen this movie already. In Italy. And it is like standing in quicksand. Slowly and steadily you feel suffocated by unrealistic constraints.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/29/11

An interesting idea I heard on the radio

What is happening in Washington is a momentous event.

We are trying to redefine and rethink the purpose and size of government. There is no doubt we cannot continue doing business as usual.

An increasing number of people (left, right, and center) are beginning to realize this concept.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Fiddling away

Gross domestic product climbed at a 1.3 percent annual rate following a 0.4 percent gain in the prior quarter that was less than earlier estimated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 1.8 percent increase. Household purchases, about 70 percent of the economy, rose 0.1 percent. (Source: Bloomberg).

Congress is fiddling as Rome and the country are burning.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

European opinion

When Barack Obama took the White House by storm in 2008, he made it clear from the beginning that a political program in America's interests could only be successful if it were not characterized by political entrenchment, but rather by coming together above party lines.

He called for an end to the disruption and the grueling conflicts between Democrats and Republicans, which had paralyzed the country and led to voter dissatisfaction.

But Obama's well-intended resolutions experienced a serious setback in the implementation of his first major project, the health care reform. Obama's ambitious vision - to make health care accessible to all - was picked apart in endless debates and votes. In the end, only a watered-down version was left.

A similar scenario is emerging in the current debate on raising the US debt ceiling and the impending threat that Washington will run out of money to pay its bills. (Source: DW, Rob Mudge heads the English service's background international team)


George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/28/11

What I told my grandchidren

I went sailing for a few days with my grandchildren. They are very young but the father allowed them to invest in the market. To teach them how the market works.

I found myself telling them that you buy only when you know when to sell what you buy.

For instance, I started buying gold some time ago -- in spite of the already strong move the metal enjoyed – because I found a pattern typically associated with a top in the precious metal.

I am inviting you to subscribe to The Peter Dag Portfolio and find out my in-depth analysis of the markets.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest


To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/27/11

The markets

My sense is that the markets are concerned about the strength of the economy. My subscribers know what I think about this issue.

There is plenty to worry about. What is happening in Washington is incredible. The real issue is not the deficit but when the next budget needs to addressed. Obama wants after 2012 election. The republicans before this date.

Do they care about what the people think? Absolutely not. They worry, like all of us, about their jobs and privileges and sense of power.

Good luck America!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/24/11

Thought of the day

Republicans challenged a presidential veto threat by preparing for a short-term extension of the U.S. debt limit, hardening partisan differences in the face of warnings that a stalemate risks roiling financial markets as soon as tonight.

Boehner said he aims to announce a framework, bipartisan or not, later today to try to minimize uncertainty before Asian markets open. Senator Tom Coburn, an Oklahoma Republican, said on NBC that Obama’s veto threat is “a ridiculous position because that’s what he’s going to get presented with, that’s the compromise way through.”

President Barack Obama would veto a deal to raise the debt ceiling if it doesn’t extend the limit into 2013, White House Chief of Staff Bill Daley said in an interview on NBC’s “Meet the Press.” (Source: Bloomberg)

My view? Lack of leadership is the main issue in this charade.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/23/11

Question

The president didn’t hide his frustration with the turn of events yesterday, saying Boehner didn’t return his phone calls during the day, observing it wasn’t the first time during the debt-limit talks he had been “left at the altar,” and declaring the Republicans had walked away from “an extraordinarily fair deal.” (Soorce" Bloomberg)

Is the President out of the loop?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/22/11

Business cycles and stock sectors

Caterpillar Inc. (CAT), the world’s largest construction and mining-equipment maker, posted lower- than-expected profit for the first time in 10 quarters after the Japanese earthquake reduced sales and manufacturing costs rose. (Source: Bloomberg)

The weakness in CAT may reflect a transition of the business cycle from Phase 2 to Phase 3.

I discuss in great detail in my The Peter Dag Portfolio which sectors display good relative performance with lower volatility during Phase 3. Why not subscribe now to our service? Just click here.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/21/11

Thoughts

Politicians and analysts complaint about our weak economy. We need jobs, they say. What to do?

I know per sure only one thing, a simple idea. Countries that grow slowly with high unemployment are and have been countries strangled by too many controls, too much concentration of power, too many vested interests.

It is so simple. Yet, we are thinking how to increase even more the dominance of the government with new agencies to protect us from birth to death.

They are all noble causes. But there is a limit. There is a limit to how much we can stimulate companies, economic sectors, the whole economy. At some point we have to let the animal spirit fly freely.

Why are we afraid to be free? Why do we want to be protected and belong to a favored group. What is happening in Europe is so tragic because it is a great lesson. I learned it because I lived there for many years. There is no escape once the government and power groups control everything you do.

The default is not a financial default. It is a human default. It is the default of the people. Because they will be forced to live in poverty for many years.

How do we defend oursevls from this historic pattern? This is the real challenge.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

States friendly to business

Some observers are saying business is leaving Ohio. Why? Well check this table. It shows which states are friendly to business and which ones are not.

Just click here for the complete listing.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market patterns

The S&P 500 bottomed at 1258. Jumped to 1356, but encountered strong resistance at these levels. It retraced about 50% (classic move), bottoming at 1295. And now it has been soaring again.

The trend seems to be up from a technical viewpoint because the low of 1295 is above the previous low of 1258.

Now the next hurdle. 1350 remains a strong resistance level. If the S&P 500 sails through this level the market is likely to go much higher.

What are our technical indicators saying? You are invited to subscribe to The Peter Dag Portfolioby clicking here.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/19/11

What to do?

We've heard a lot of questions about what investors should do in their portfolios to account for the risk of a default. We continue to preach the benefits of diversification among and within asset classes, both domestic and international. (Source: major brokerage house)

The issue discussed by this analyst was: what to do in an environment characterized by financial risk with countries, not just banks, in danger of defaulting?

How should you structure your portfolio?

The advice given was "diversification". I do not agree in the strongest way. If you really have to diversify across all asset classes why not by SPY, the ETF for the S&P 500. This is the ultimate diversification.

The problem is that this strategy has produced zero return since 1999, for more than 10 years.

What is the answer then? I believe that selecting few investments that "fit the times" is the secret to making money. But you have to do your homework.

My personal portfolio is in only one asset class (not cash and not gold) which has done extremely well since 1999.

You may want to subscribe to The Peter Dag Portfolio to find out what I think.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/17/11

New free video on the business cycle

You can now review, absolutely free, a new video on the impact of the inventory cycle on the financial markets.

In this video I am showing you how business decisions determine the trend of the financial markets.

There are now eight free videos on various aspects of the business cycle on https://www.peterdag.com. I hope you find them informative and educational

Sincerely,

George Dagnino, PhD
Editor
The Peter Dag Portfolio
Since 1977

Observations

When I look at the methodology I use to reach my forecasts, also discussed in detail in my book Profiting in Bull or Bear Markets, I cannot fail to feel a sense of inevitability. I am referring to the three graphs showing the turning points in the leading, coincident, and lagging indicators.

These three simple lines summarize the action of monetary, economic, and financial markets. The logic tying their behavior encapsulates history and at the same time they tell you what to expect in the future. The cause and effect relationships they represent between economic and financial variables convey a sense of inevitability.

We are just players, trying to influence their behavior. The only effect we hope to achieve is to control their amplitude, their volatility. The higher their instability, the more pronounced is our economic discomfort. But the immutable relationship between these three lines cannot be changed.

Our history is full of crises with different types of political leaders trying to change our destiny, trying to convince us that their way of managing the process is our best option. Yet, you can rest assured that the sequence of turning points of those three simple lines will not be affected. It will remain unaltered by the publicity stunts played by our leaders.

The press, analysts, and financial TV networks use reams of paper and an inordinate amount of time to analyze what has been done, what should have been done, and what might happen. In spite of the time spent and of all the plans made, those turning points will continue to follow each other with an amazingly consistent regularity.

They seem to follow precise instructions. It feels like looking at a parade. The music plays. People move, as you would expect. They always did it that way. They will continue to do it forever.

The reason for the three lines to behave consistently as they do is because they reflect the decisions of consumers, investors and businessmen. Some economic players act. Others, because of their position in the economic chain, react to what is happening. In other words, the actions of the three lines reflect the causality and feedback built in the system.

Causality takes place, for instance, when the money available in the banking system is borrowed to invest and to buy goods, thus causing the economy to grow faster. Another example of causality is that the strong demand for goods eventually causes strains in the system. The outcome is that commodities, inflation and interest rates rise.

But interest rates and commodities cannot rise forever. At some point feedback gets into the picture to bring the system back into equilibrium. For instance, the rise in interest rates forces people and businessmen to borrow less which will eventually force the economy to grow at a slower pace and ultimately cause interest rates to decline.

All these thoughts crossed my mind as I was preparing the forecast for 2002. What is difficult is to remain objective, to focus on the trends that matter, and to avoid getting involved with the emotions of the times. One needs to keep in mind that, in spite of all the clamor, the more things change, the more they stay the same.

(This Observations appeared in the 1/24/02 issue of The Peter Dag Portfolio)

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/16/11

The reason for the strength of the euro

China has inked trade deals worth several billion euros with Germany, its largest trading partner in the EU, after talks between their government leaders this week. (Source: W/DW

The developing countries need the German technologies and know-how. They have to buy euros to get them.

The world has more competitive goods and services than the US. This is the reason for the weakness of the dollar relative to the euro.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Gold, revolts, and dreams

Egypt's Military Council has warned protesters it will move in to break up the demonstrations. (Source: W/DW)

People revolt chasing dreams. Or instigated by power grabbers.

The outcome is new power groups with a dictatorship slant. See what happened after the French revolution. Or in the Russia/USSR.

The world is in turmoil. It is the only reason for the relentless rise of gold prices.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/15/11

Questions

More and more data suggest the economy is slowing down (more details in my The Peter Dag Portfolio).

Could this slowdown become a serious recession? (reviewing my free videos on www.peterdag.com will help you).

What is the best strategy? The answer to this question depends on the trend of my proprietary indicator "financial risk", which is reviewed in each issue of my publication.

Slow growth, furthermore, has an impact on earnings.

Questions. You will find the answers in my The Peter Dag Portfolio.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

I have been saying this for years

Europe is in a dire situation. If it doesn't address the underlying causes of the Greek crisis quickly, Europe's political project will face the same fate as communism and the US Confederacy, writes James K. Galbraith.

The problem is that the consequences could be cataclysmic from an investment viewpoint.

Or, the markets could respond favorably because finally the politicians and power grabbers bureaucrats will finally be forced to make some sense out of the European experiment.

I go back to productivity differentials between nations. The countries with low productivity will always be dominated by countries with high productivity.

The US proved it in the 1960s. Germany and Japan proved it in the 1970s and Germany proves it again today.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/14/11

Thought of the day

The size of the government deficit relative to the size of the economy, in any country, anytime, reflects the concentration of power in that country. The higher the deficit, the higher the concentration of power.

The outcome of high concentration of power is very slow growth in that country.

And the income diferential increses with the deficit. Why? Because "us" are being forced to pay "them" the interest on the bonds they hold.

Who are "them"? The bondholders who financed the deficit. And as the deficit increses the transfer of wealth to "them" keeps mounting. Thus further increasing the concentration of power.

The problem is that this process cannot be stopped.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/13/11

The bottom line

European governments can no longer count on their financing costs remaining similar to those of Germany, the region’s strongest economy, simply because of their participation in the single currency, he [Draghi, new chair of the ECB]said.

I have also wrote that the reason countries wanted to get in the EU was because the low borrowing costs so that they could borrow and spend without creating the wealth to repay the debt.

Europe has more chances to break than really unify. Every country wants to run its own show, in a nationalistic way.

Good luck!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/12/11

What am I thinking?


Some municipalities are going bankrupt. More and more European countries are in trouble.

It looks like the momentum toward bad news is increasing.

Like in 2007-2008.

I hope to be wrong like everybody else.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

What's wrong with this idea?

Like in New Zealand, we could have a health care system as follows.

From this point on .....

Give free medical assistance to those with an income below the poverty level (or something close to it).

Everybody else buys health insurance.

Insurance can be purchased across state lines.

Current medicare recicipients will continue to be part of the current plan. As they pass to a better world the cost to medicare will decline.

What's wrong with it?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/11/11

I have been there

Both Italy and Spain are starting to look more vulnerable,” said Niels From, chief analyst at Nordea Bank AB in Copenhagen. “The fear is that this is going to continue as the market starts focusing on the larger euro-region nations. (Bloomberg)
When Draghi, the governor of the bank of Italy left to become the president of the ECB, said that the Italian problems are vested interests and the many guilds/unions safeguarding their turf.

The outcome? Italy has been stagnant. As I wrote many times for my subscribers, concentration of power results in slow growth.

Italian bond yields have been soaring to the levels of Spain. Like with General Motors, people in power would rather sink with the boat than save it.

One more idea I wrote about over and over again. The European countries cannot survive together. There is too much competitive differential among them to make the one currency union survive.

Make no mistake about it. When you see the economy of a country going nowhere, the main reason is that there is too much concentration of power.

Is this what is happening to us>

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/10/11

Did you check my educational videos on the business cycle and financial markets?

If not, just click here. They are free?

Why do I do this? Because --first of all -- I am an educator at heart.

Second, because I want to show you what are some of the issues I discuss to make investment recommendations on  The Peter Dag Portfolio.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Fascinating guitar music



Enjoy this marvellous execution of "Asturias" by Isaac Albeniz..

Have a nice week-end.

George

7/8/11

Interesting statistics

When consumer confidence [of the Conference Board] is over 110 equities have returned -0.2% per year. When consumer confidence is between 66 and 110 equities have returned 6.4% per year. And when consumer confidence is below 66 equities have averaged an annual return of 14.9%.(Charles Schwab).

Why? Because when consumer confidence is low the economy is not doing well, The outcome is that the Fed starts printing money more aggressively.

And stocks rise when the Fed eases.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market patterns. Double dip?

The business cycle is the major and paramount force driving prices of all asset classes.

Today's news -- employment report very weak. Stock market down. Bond prices up.

Why? Check my educational videos on my website www.peterdag.com

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

To my subscribers

Nonfarm payroll employment was essentially unchanged in June (+18,000), and the unemployment rate was little changed at 9.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment in most major private-sector industries changed little over the month. Government employment continued to trend down. (BLS)

This is really bad news. The economy is in bad shape according to this report. My analysis in the past issues of The Peter Dag Portfolio and in the current one (7/10/11) explains the implications for the future.

It also reflects, in my humble opinion, on the policies of this administration focusing on social issues rather than the dynamics of growth.

The bottom line. The economy is dead in the water.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/7/11

Why the Euopean countries want to join the EU.

A stunner in the JCT press conference, who just announced that the ECB is willing to accept any junk that comes its way. Specifically he said that the ECB has decided to suspend a rating requirement for Portuguese collateral, and that the ECB will shortly issue a press release on the matter. Obviously the bank is now making stuff up as it comes alone. He also added that the suspension will be maintained until further notice. Expect this move to affect Italian, SPanish and all other insolvent country debt shortly as it becomes all too clear that the ECB will do everything in its power to give out cash against insolvent paper. And now you know what Europe's QE looks like. (Zero Hedge)

This is the reason every country wants to become member of the European Union.

They can borrow at close to 0% interest rates from the ECB.

Finance all their wasteful projects, knowing full well the ECB will bail them out.

The give their defaulted bonds to the ECB (they did not make the right investments to generate the wealth to pay the interest of the bonds).

That done, start an austerity program.

And when everybody forgot what really happened, start all over again.

Is it crazy? Yes. And this is the reason Europe will fail miserably.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

They had to do it, but ...

Officials meeting in Frankfurt today increased the benchmark interest rate by 25 basis points to 1.5 percent, matching forecasts by all 55 economists in a Bloomberg News survey. That’s the highest since March 2009. The central bank will raise borrowing costs further in October, according to a separate survey. (Bloomberg)

The ECB worries about the strong countries of northern Europe.

These countries have to remain strong with no inflation so that they can pay the bills of the peripheral countries.

I am not sure how successful the ECB is going to be now that is also accepting the defaulted bonds as collateral.

Furthermore, with inflation at 2.7% short-term interest rates should be close to 4%. The point? Real interest rate in Europe, as well as in the US, are too low relative to inflation and are inflationary.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/6/11

Inflation and interest rates in China

The black swan.

China is trying to control inflation. The problems is that inflation is 5.5% and interest rates are 6.56%.

Interest rates are too low. Short-term interest rates should be close to 8%.

Bottom line? Inflation in China is likely to rise much more.

The problem is that the higher inflation goes, the sharper the ensuing slowdown is going to be.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Where have we been in the past 2 years?

Interesting data (click on the chart to enlarge it).

No comment. These data tell us quite clearly what has happened.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/5/11

New home page with educational videos

We have a new home page at www.peterdag.com.

What makes it different is that now you can review several videos explaining my views on how the business cycle impacts the financial markets.

please give me your feedback and let me know if you wish I discuss any particular subject. Thank you.

To go to the website just click here.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Are we in Phase 3 of the business cycle?

Funds reduced bullish bets on commodity prices to the lowest level in almost a year on speculation that slowing global growth will curb demand for metals, energy and grains. (Bloomberg)

If the fund managers are correct we might be in Phase 3 of the business cycle.

As discussed in detail in my book Profiting in Bull or Bear Markets, investors should dramatically change their investment strategy. Assuming the funds are correct in what they see ahead for the economy and we are in Phase 3 of the business cycle.

This issue will be discussed in great detail in the next issue of The Peter Dag Portfolio.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Time to pay the piper

Florida is firing 1,300 workers. New York is cutting education funding and freezing public employee wages for three years. Arizona is slashing Medicaid coverage. And municipal bondholders are having their best year since President George H.W. Bush was in the White House. (Bloomberg)

The politicians gave us too much as in Greece, Portugal, Spain, Ireland, Italy, Belgium, ...

We forgot we have to pay the bondholders. They are dictating how to play the game. Cuts are made everywhere in the world because they want to be paid.

Does this mean it pays to invest in bonds and be a bondholder? In the last 10 years it seems that this strategy would have provided very attractive returns. How?

This question will be answered in the next issue of The Peter Dag Portfolio. Why not subscribe now by going to www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/4/11

Observations

In a gray parking lot. I wanted to write about the crisis in Argentina because I feel very strongly about it. They are making big mistakes and there are important lessons to be learned from history. But I am not going to do it.

Instead I decided to write about what happened to me in a parking lot. A gray parking lot. Half full. You could see the many yellow lines going everywhere. Nowhere. The cold blue December sky made the air crystal clear. The sun was shining on the asphalt.

We arrived for a business lunch at a private club for businessmen. The car we used was black – what else. We got out of the car, talking about a business opportunity. I was curious to see what kind of food they were going to serve. You see, I like to eat well.

Suddenly, disturbing the order of what was happening, a black man came out of nowhere. He was angry. Very angry. He stayed at a respectful distance, but he soon started to yell. He was looking at us as if he wanted to tell us something. I do not think he was asking for anything. He was wearing new, sparkling white running shoes.

Anyway, I could hardly understand him. And we were cautious because we really did not understand what was happening. I could capture two sentences in the midst of his diatribe. “I need gas”, and “He called me nigger”.

Suddenly I realized that I had in front of me the human condition. He was frustrated and mad because someone called him nigger. He was right. He was mad. Poverty. The need to tell other people, in a furious way, that he needed help. He needed to be associated with someone.

What was impressive was the intensity of this man. Why was he so excruciatingly mad? Was he trying to get some money? Was it worth it? The routine seemed too different from the usual beggar. Besides, those white shoes intrigued me.

I felt something inside. I wanted to tell him that, in a way, I understood his plight. I needed to see a nice, happy face in front of me for just a few seconds. There are enough tragedies around the world. I took a $20 bill and gave it to him.

He could not believe it. His face changed. A smile. A soft, confused thank you came out of his mouth. He was smiling now. My party slapped my shoulder in a sign of understanding. For a few seconds his world changed for the better. I was pleased with the outcome. In a gray parking lot.

(This Observations appeared in the 12/26/01 of The Peter Dag Portfolio)

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/3/11

The importance of "total returns"

Total returns are computed including the investment of the dividend/interest in your computations.

Interesting enough it is difficult to find a site where to compute the total return of an investment.

We found that the total return of JNK was 32% in the past three years while SPY (ETF for S&P 500) returned 13.3% over the same period.

Using high-yield mutual funds from Fidelity and using their website, they show that in the past 10 years the typical high-yield fund more than doubled and some tripled their total return while SPY returned 30% in the same period.

I am intrigued by these figures given the bearishness on bonds by some major gurus/experts.

Why are high-yield bonds' returns so high? Will history repeat itself? For a detailed answer please subscribe to The Peter Dag Portfolio on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/2/11

A disturbing relationship

This chart shows two graphs -- consumer price inflation and producer prices for finished goods (click on the chart to enlarge it).

What is the problem, you ask? Very simply... The higher inflation goes, the more severe the slowdown/recession that follows.

This relationship is discussed in much detail in my book Profiting in Bull or Bear Markets (published in English and Mandarin) and in my The Peter Dag Portfolio.

It has important investment implications for all asset classes.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/1/11

The global business slowdown

European manufacturing expanded at the weakest pace in almost two years in June, adding to signs that the region’s economy is losing some momentum (Bloomberg).

I’ve studied many bubbles over the years, and concentrated on predicting their demises. Commodities show every sign of being in one. (Shilling in Bloomberg)


As I mentioned in previous posts, commodities rise and decline for a solid economic reason.

They rise when the economy is strong and decline when the economy is weak.

They are a very sensitive gauge of business activity and no one can manipulate their price for too long. Eventually the markets always win.

If you believe, as I do, that you buy bonds for capital appreciation, are these trends favorable for bonds?

More on The Peter Dag Portfolio.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.